A 20-foot Picasso painting is leaving its storied place in the hallway of the Four Seasons restaurant after the building owner dubbed the canvas a “schmatte,” Yiddish for “rag.”

Peg Breen, head of the New York Landmarks Conservancy, which owns the work, said “Le Tricorne” will be moved from “Picasso Alley” in the Seagram Building on East 53rd Street to the New York Historical Society at Central Park West and 77th Street.

Breen had sued Seagram Building owner Aby Rosen in February after the real-estate kingpin said he planned to tear the iconic 1919 painting off the wall of the Four Seasons hotel — where it had hung since 1959.

The conservator had feared that removing the canvas, which had hung as a theater curtain, would cause it to “crack like a potato chip” and said Rosen’s claims that he needed to fix a deteriorated wall behind it were bogus.

“Rosen’s insistence that the Picasso Curtain be removed is Mr. Rosen’s own admitted dislike of the Picasso Curtain,” the conservancy huffs in court papers.

Rosen is a well-known collector of more contemporary artists such as Andy Warhol, Damien Hurst and Keith Haring.

But the two are on better terms now after striking a deal earlier this week that Rosen would pay for restoration, moving and reinstallation of the $1.6 million Picasso.

The work will all be “generously funded by Mr. Rosen,” according to a joint press release put out by the parties Thursday.

Rosen’s spokeswoman did not immediately comment.

The giant work will hang in the second floor of the Historical Society’s Dexter Hall gallery.

“We are deeply grateful to the New-York Historical Society for having stepped forward to help safeguard this cultural treasure of our city and make it accessible to the public,” Breen said.